During the coalition negotiations, it was announced that a special representative of the government would be appointed to Ida-Viru County. Initially, it was said that the special representative will deal with the important problems of the region, contribute to the development of the county and provide all kinds of assistance.
I, like probably many others, do not understand the real benefit of one more civil servant in Ida-Virumaa. Why can’t more heads of municipalities and companies be included in the discussions of the problems and issues of Ida-Virumaa?
At the time of receiving the authorization to form the government, Kaja Kalla emphasized in the Riigikogu hall that “There is a separate small chapter in the coalition agreement dedicated to Ida-Viru County”. According to him, this must mean that the government has shown serious concern about the fate of Ida-Virumaa. As for the special representative, dealing with this issue was delegated to Regional Minister Madis Kallas.
The government is in no hurry to deal with Ida-Virumaa
Recently, I tried to specify what the special representative will do anyway and whether the creation of this position will help to solve the many problems that have accumulated in the region. The minister’s answer was very clear: there is still no idea about the duties and powers of the special representative. Also, the coalition can’t agree on whether only Ida-Virumaa needs a special representative of the government or other regions as well. Unfortunately, the government is in no hurry to deal with Ida-Virumaa. One reason is that the voters of coalition parties live in other regions of the country.
Against the background of all the government’s assurances to actively promote the development of Ida-Virumaa, one nuance is worrying: the coalition agreement states that the government intends to review the amount of environmental usage fees. Considering how eagerly the government began to raise taxes and introduce new ones and cut subsidies, it cannot be ruled out that the government is maturing the idea of raising environmental fees as well. For the state, the various environmental fees received from oil shale companies have always been a decent source of income. For example, last year companies in Ida-Virumaa paid almost 670 million euros in fees related to environmental damage.
I don’t want to be too pessimistic, but the near future of Ida-Virumaa is a serious concern. Unemployment in the county is the highest in Estonia, and in the background of all this, people are facing tax increases and cuts in family allowances. Spa hotels have been saying for a long time that they can’t do it, because the price increase has led to a decrease in the number of tourists. For example, located in Narva-Jõesuu Youth Spa The hotel has repeatedly laid off employees and closed its other hotel (Noorus Spa Inn) for the winter.
The proposed more than doubling of VAT on accommodation could bankrupt hotels and make the tourism sector struggle survival on behalf of. Increasing sales tax will inevitably affect jobs, the region’s reputation as a tourist destination, opportunities for infrastructure development, etc.
Irreversible consequences
This is confirmed by the tourist companies of Ida-Virumaa, who in their address to the government at the end of May emphasized that the increase in the VAT rate for accommodation will have the opposite effect – tax receipts to the state budget will decrease. Hotels are forced to raise prices, resulting in fewer visitors. The spa hotels of Ida-Virumaa, which have already lost customers from Russia due to the war, will suffer more than others.
The saddest thing is that the increase in VAT for accommodation could lead to irreversible consequences: the extinction of the spa hotel sector. Water-related infrastructure is damaged without water. Its restoration would require large-scale investments, which the hotel owners cannot afford.
I really hope that the work of the opposition and opposition to the adoption of ill-considered decisions by the coalition will bear fruit. Already, the coalition appears ready to make concessions, abandoning the original plan to raise the VAT on accommodation to 22 percent. We intend to continue working so that the given tax rate is reasonable.
The tension increases
The government’s complete unwillingness to listen and listen to local government leaders and residents causes people to become frustrated and distrustful of the state. During the last year, the state has constantly shown its cautious attitude and fears to the residents of Ida-Virumaa, constantly demanding from them to prove their loyalty.
The government’s desire to take away the right to vote in local elections from permanent residents, the fight against monuments, the urgent renaming of streets, the abandonment of investments (for example, plans to build shelves for a four-lane highway) and the extremely quick, ill-considered and unprepared transition to Estonian-language education – all this only increases the gap between the residents of Ida-Virumaa and the state.
The tension is also increased by the government’s economic and regional policies, more precisely, their absence and the government’s inability to hold a dialogue with the people. If the government does not reconsider its attitude towards the region and does not quickly move from words to actions, it will take decades to restore the economy to even the pre-crisis level. However, it may take much more time to restore people’s trust in the state.
